Thursday, February 2, 2012

Contrary to popular chatter, there seems to be little or no correlation between the amount of money a party or a candidate has and the likelihood of it winning an election. It is time we consider removing the limits on election expenditure, that has done little to restrain cost of elections. A law that can neither be obeyed nor enforced, is contributing to undermining the legitimacy of democracy, and of politics. Therefore an open election expense law, with no limit but complete disclosure, would be a better idea, I suggest in this article in the Financial Express, on 2 February 2012.

There can be no two opinions that Indian elections have become prohibitively expensive. Also, there is widespread apprehension that money is used to unduly influence voters.

Despite reams lamenting these threats to democracy, and a constant flow of anecdotal reports in the media, it is really surprising that there is little hard evidence to support such fears. Let us look at some of the evidence and arguments that are used to support the view that money is corrupting the election process.

Currently, the election expenditure on each candidate is limited by law to R25 lakh in a Lok Sabha constituency, and R10 lakh in a Vidhan Sabha constituency in large states. Candidates are to maintain daily accounts, and also to submit a final statement within 30 days of the election.

The Election Commission has made rigorous efforts to monitor election expenditures during the two weeks of campaigning. Expenditure observers are sent out, armed with a 165-page document on how to keep track of election expenses, including videography. There is another 10-page document on the ECI website that lists various provisions of laws relating to offenses and corrupt practices in connection with elections.

With such a proactive role, one would expect that the ECI has been successful in prosecuting and punishing the guilty. Over the years, there have been barely a handful of instances when ECI has been able to disqualify a winning candidate for violating the election rules. In all these years, not one candidate has filed an election account above the permissible limit, and no one has been prosecuted for exceeding the expenditure limit.

In one case, a person was disqualified because of his failure to submit the account within the time limit. Last year, an MLA from UP, who had won the assembly election in 2007, was disqualified because of complaints lodged by another candidate. The charge was of placing misleading advertisements in local newspapers, which could be mistaken as positive news coverage. The ECI found the person guilty of not reporting an amount of around R21,000 paid towards these advertisements, and barred her from contesting elections for the next three years. A more celebrated case, against the former Maharashtra chief minister Ashok Chavan, for using “paid news” in the 2009 state assembly election, has been pending before the EC.

These few instances would suggest that either the ECI has been spectacularly successful in enforcing the election expenditure limits, or that the ECI has miserably failed in this regard.
However, the ECI admits that there is a problem. They point to the R75 crore seized during assembly elections in 2011. In the current election season so far, the EC has seized about R45 crore of cash.

While these figures are large, they pale in comparison to what is commonly believed to circulate at election times. It is thought that to mount a serious election campaign in an assembly constituency today, at least R1 crore is needed. With about 700 constituencies going to polls in this round, spread over 5 states, that would total up to around R1,400 crore, if one conservatively assumes that only two serious contenders are present in each constituency.
Recently, officers of the Income Department had been quoted in the media saying that they expect about R2,400 crore of black money to be spent in the ongoing UP assembly election alone. Clearly, there is a huge gulf between the legally permissible expenditure, the ECI’s capacity to monitor and enforce the law, and the wider perception.

After a prolonged campaign by citizens’ groups, 10 years ago, the Supreme Court had ordered that all candidates had to file an affidavit before the election authorities, containing information about their assets and liabilities, their educational qualifications, and to make public their criminal records.

A summary analysis of the average assets of MLAs of major political parties from all the states suggest that there is no evidence to suggest that rich candidates can help their parties win the election in any significant way (see table).

Punjab is going to poll this time. In 2007, the average asset of Congress MLAs in Punjab was significantly higher than that of the Akali Dal and BJP. Yet, the former lost that election. This time, the average assets of Akali candidates has almost doubled from R4 crore to R7.5 crore, while that of the Congress candidates has increased from R5.3 crore to R8.2 crore. Yet, no party is sure of winning the election, although in the past 40 years, Punjab has never reelected the governing party.

In another crucial state, Uttar Pradesh, in 2007, the average assets of BSP’s MLAs was R70 lakh, while that of the Congress and the SP was R2.9 crore and R1.4 crore, respectively. Yet, BSP surprised most people by winning a majority of its own in the state for the first time.
Another state where money is believed to play a significant role in elections is Tamil Nadu. In 2006, the average assets of DMK and Congress MLAs was R95 lakh and R2.4 crore, respectively. The DMK alliance had defeated the ruling AIADMK alliance, whose MLAs could only average about R89 lakh. However, in 2011 election, the tables turned. While the DMK and Congress MLAs have average assets of R9.2 crore and R6.2 crore, respectively, a significant increase from five years ago, they lost the election to AIADMK whose MLAs had an average asset base of R3.4 crore.

In Gujarat, after the 2007 election, the average assets of Congress MLA were more than that of BJP, although the latter won the election handsomely for the third time in a row. On the other hand, in Rajasthan, the average assets of BJP MLAs after the 2008 election stood at R2.8 crore, but it lost the closely fought election to Congress whose MLAs’ averaged R1.8 crore in assets.

Money is important in an election, but even more important is the message that resonates among citizens. The historic Lok Sabha election of 1977 showed the importance of the message, and the capacity of the ordinary voter to choose. For the first time, the Congress lost power at the national level despite its total political dominance at the time, and unlimited access to money and power.

The debate over the role of money in elections has fatally damaged the credibility of the political leaders, all of whom support election expenditure limits. They have made a law, which can neither be obeyed nor enforced. This has made the politicians look highly hypocritical, and inevitably raised questions over their own legitimacy. This has also led to undermining the credibility of elections, the most critical element in a democracy.

Also, the focus on election funding has diverted attention from the more basic reasons for corruption in public life, such as discretionary powers that provide lucrative opportunities for rent seeking by public servants.

The limit on election expenditure could also be considered to be a limit of freedom of expression. How and why should a supporter of a particular candidate be stopped from doing do? This was an argument that was successfully presented before the US Supreme Court in the 1970s, which had ruled campaign finance limits to be unconstitutional.

The focus on money power actually is an insult to the capacity of the ordinary voters in the country, who regularly participate and repeatedly demonstrated the legitimacy of the electoral process. If the voters are willing to sell their votes for a few rupees, then the country may not be worth saving.

Rather than election expenditure limits, it is time to rethink the idea itself. An open election expense law, with complete disclosure, and a severe penalty for non-compliance would not only be politically desirable, but also legally enforceable. Such a change in our law would go a long way in cleaning up our election system.